Monday, June 13, 2016

Predicting Accurately: Focus on Outcomes First, Not the Details?

Theresa F. Kelly and Joseph P. Simmons have published a new study in the Journal of Experimental Psychology regarding our ability to make accurate predictions. Kelly and Simmons conducted 19 experiments involving over 10,000 research subjects. They studied people's ability to predict the outcomes of 724 professional sports contests. Interestingly, they found that participants were less effective at predicting the outcomes of games if they also were trying to predict details about the contests (e.g. if they tried to predict the number of hits each team would get in a baseball game, while also trying to predict the final score of the game).

Why might people become less effective in predicting the outcomes of games if they were also trying to forecast specific details about those contests? The scholars explain,

We believe that this happens because having people predict the details of an event makes them think about additional information that is unimportant for predicting other related outcomes; however, once this information is made accessible in memory, people are more likely to use it in their forecasts, decreasing the weight given to more important information. This suggests that a relatively simple way to improve predictions could be to take a top-down approach and start by first predicting the most general outcomes and then letting those forecasts guide predictions of more detailed outcomes. Importantly, this prescription is not intuitive, as most decision-makers feel compelled to try to think through all of the available details about an event before making their forecasts (Lovallo & Kahneman, 2003).

No comments:

Michael Roberto

The Great Courses

About Me

I am the Trustee Professor of Management at Bryant University in Smithfield, RI. I joined the faculty after serving for six years on the faculty at Harvard Business School.

My research, teaching, and consulting focuses on leadership, with a particular emphasis on decision-making and teams. I have published two books based upon my research: Why Great Leaders Don't Take Yes For An Answer (2nd edition to be released in May 2013), and Know What You Don't Know (2009).